The Terminated Employee (Welfare) Bill, 2020, introduced in Parliament

The Bill assures income for 9 months if an employee is laid off due to no fault of his


A private member bill— The Terminated Employees (Welfare) Bill, 2020— was recently introduced in the Parliament. It proposes that if an employee is asked to leave due to reasons, such as a slump in the economy, political instability, technological changes, a court order, or if the business becomes insolvent, and so on, then the employee should be given unemployment benefits.

Introduced by MP Rakesh Sinha, the Bill seeks to provide an employee—who is not in any way responsible for being rendered jobless by the employer—unemployment compensation and health insurance benefits, or other benefits as prescribed by the Central government, for nine months or till he gets another job, whichever happens earlier.

Such a Bill is actually a necessity since there is no law that requires employers to provide timely terminal benefits or cover education and medical expenses of the families of employees who are laid off.

It is natural for employees to take loans for household needs or to put their children in good schools and maintain a certain standard of living, based on the income from their jobs. If the job is taken away from them for no fault of theirs, it is not fair for their families to bear the brunt in any way.

The Bill proposes to provide the terminated employees with assured income for nine months, which is considered sufficient time for them to find a new job.

Will the Bill ever be passed? We can only wait and watch.


  1. It’s very unlikely that employers are going to pay for 9 months & further it will affect the ease of doing business factor. Every organization is trying to reduce max. cost of operation. It will definitely be a burden on them.

    Better the govt. should come up with an employment insurance scheme (Already present in some countries) where the employers will have to pay the premium & the employee gets the benefit after losing his job.

  2. This is to prevent mass firing happening across India. It’s good to have some rules for employers to reduce mass firing.

  3. Good one.Government should instruct every employer to mention this in the appointment letter.Bcoz if there is a dispute what is there in appointment letter only will be valid.

  4. But if the business becomes insolvent how would the company be able to 9 month to employees. In that case is the government covering the company with any kind of help/ or any rule created where the employer has to save for such losses.

  5. If this bill is pass no one will try to become entrepreuner first he take risk in doing business and if he fails or do loses than he has to further pay to employee for 9 months .

  6. The bill will not be passed or will not be implemented. It doesn’t provide compensation for termination for “poor performance”, the most common stated cause by employers. To avoid being mentioned so in termination letters, employees may be compelled to ” voluntarily ” resign hoping for next employment. Not clear if the bill is applicable to temporary or contract employees.

  7. This proposal is very much helpful to all employees in this covid situation.
    Most of the Organizations are removing or terminating the employees without any valid reason to cover up their(employer’s) in-efficiency to run the company in profits by avoiding unnecessary expenditures. Most of the companies are appointing/generating unnecessary/unwanted new positions by paying huge remunerations and removing small ,mid sized and Senior level hard working employees without any valid reason.

    This kind of bill may put a check to all the employers.

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